We extend the seminal Rothschild and Stiglitz (1976) model on competitive insurance markets with asymmetric information … entry. -- casymmetric information ; competitive insurance market ; contract withdrawal …

We examine insurance markets with two types of customers: those who regret suboptimal decisions and those who don.t. In … show that both pooling and separating equilibria can exist. Furthermore, there exist separating equilibria that predict a … positive correlation between the amount of insurance coverage and risk type, as in the standard economic models of adverse …